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Assessing the Pros and Cons of the Current Housing Market

Writer / Claire Anne-Aikman
Photography Provided

I was recently pulled into a debate between some dear friends (parents and their recent college grad kids) when the topic of one of their out-of-state friends home-buying due to the market woes came up.

The parents felt that their friend was exaggerating their home-buying (or rather their inability to buy) journey. They added that mortgages are given too freely, rates are so low, and because of this the market is going to crash like it did in 2007 to 2009. When the parents stated that there are so many more neighborhoods and homes now than 15 years ago, and everything is selling without an issue, the kids threw their arms up in exasperation and were at a loss for words – so I shared the following.

My lender friends know this is not the same market. I have often heard Dan Runge, a local Caliber Home Loans guru, explain to buyers that they must be more credit worthy and ready to purchase than they needed to be five to 10 years ago. To ensure that a buyer is truly ready, there are more checks and balances (ask any buyer about the amount of information their lender required, and you will be amazed). All this reduces the credit risk (and the potential for another burst in the market). Also, the increased interest rates that are meant to help balance and steady the market have not necessarily slowed buyers, as many still see the value in purchasing even with an increased rate. From his perspective, the loan volume is still high, and so is the competition to get a home.

As for the plenty of new homes” point, I could not dispute that there are more homes, but the population in Hendricks County has also grown and is now the ninth most populated county in Indiana (according to datacommons.org). The result of more people moving helped push the building boom that we have been experiencing – all of which has not relieved the shortage of homes. That shortage has increased demand, and that demand has increased prices year over year for 10 years. These last few years reflect a faster increase in prices than we have seen.

For giggles, I shared that in 2012 the median home price in Hendricks County, according to MIBOR, was $118,000. Everyone gasped. In 2022 it is $245,000, and we are only halfway through the year at this writing and that will likely increase. I reflected back to when I helped the parents purchase their home and reminded them that it was a buyer’s market” – there was ample supply, and buyers could actually ponder the pros and cons of each home while sellers slowly and methodically packed. Since the tail end of 2012 we started to see that monthly supply dwindle, and since 2018 it has been seriously low.

It was a fun discussion. The parents shared that their first home cost $81,000 and the interest rates were in the double digits. We broke out calculators (because we are all a bit geeky), and calculated and commiserated because, at the end of the day, it is a challenge to buy a home, yet the rewards are still worth the challenges.

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